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Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

The Banking Industry Is All About Confidence

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Image Source: 401(K) 2012 The “5 Cs of credit” — character, capacity, capital, collateral, and conditions — is a widely-followed framework and generally-accepted guideline for lending to consumers, but for corporate entities, we think another C is much more important: confidence. By Brian Nelson, CFA The financial sector, and the underlying banking industry in particular, is distinctly different than most other sectors like industrials, retail, or healthcare, for example. Unlike the latter industries, banks use money to make money (net interest income), instead of using operating assets like property, plant and equipment (PPE) and raw materials to drive revenue and resulting free cash flow. This means that continued access to money and credit is the primary source of banks’ economic returns … Read more

Dividend Increases/Decreases for the Week Ending May 27

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Below we provide a list of firms that raised/lowered their dividends during the week ending May 27. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Bank of Montreal (BMO): now C$0.86 per share quarterly dividend, was C$0.84. Brandywine Realty Trust (BDN): now $0.16 per share quarterly dividend, was $0.15. Bunge (BG): now $0.42 per share quarterly dividend, was $0.38. Cabot (CBT): now $0.30 per share quarterly dividend, was $0.22. Canadian Imperial Bank (CM): now C$1.21 per share quarterly dividend, was C$1.18. Donaldson (DCI): now $0.175 per share quarterly dividend, was $0.17. … Read more

Dividend Increases/Decreases for the Week Ending December 4

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Below we provide a list of firms that raised/lowered their dividends during the week ending December 4. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Bank of Montreal (BMO): now C$0.84 per share quarterly dividend, was C$0.82. C.H. Robinson Worldwide (CHRW): now $0.43 per share quarterly dividend, was $0.38. Canadian Imperial Bank of Commerce (CM): now C$1.15 per share quarterly dividend, was C$0.84. Canadian Western Bank (CBWBF): now $0.23 per share quarterly dividend, was $0.22. Citizens Holding (CIZN): now $0.24 per share quarterly dividend, was $0.23. CoreSite Reality (COR): now $0.53 … Read more

Asset Managers: Capital Retention In the Name of Capital Preservation

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In recent years, the operating theme for many asset managers has shifted to capital preservation, particularly in their efforts to serve the large and growing number of baby boomers and commercial clients managing pensions. This is a reasonably expected change when considering that many investors lost a significant amount of capital during the Financial Crisis, many of which are still recovering. The ramifications of the credit crunch have led to requirements for increased transparency and regulatory compliance, adding structural costs to the asset-management business model, but this is only one side of the coin. The volume of investable assets is set to increase to a whopping $102 trillion by 2020 from ~$64 trillion today, fueled by an increase in the … Read more

Dividend Increases for the Week Ending May 29

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Below we provide a list of firms that raised their dividends during the week ending May 29. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Bank of Montreal (BMO): now C$0.82 per share quarterly dividend, was C$0.80. Canadian Imperial Bank (CM): now C$1.09 per share quarterly dividend, was C$1.06. Donaldson (DCI): now $0.17 per share quarterly dividend, was $0.165. El Paso Electric (EE): now $0.295 per share quarterly dividend, was $0.28. Extra Space Storage (EXR): now $0.59 per share quarterly dividend, was $0.47. Hewlett-Packard (HPQ): now $0.176 per share quarterly dividend, … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Dividend Increases/Decreases for the Week Ending May 30

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Below we provide a list of firms that raised/lowered their dividends during the week ending May 30. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Altisource Residential (RESI): now $0.45 per share quarterly dividend, was $0.40. BMO Financial Group (BMO): now $0.78 per share quarterly dividend, was $0.76. CSG Systems (CSGS): now $0.1575 per share quarterly dividend, was $0.15. El Paso Electric (EE): now $0.28 per share quarterly dividend, was $0.27. First Connecticut Bancorp (FBNK): now $0.04 per share quarterly dividend, was $0.03. Pegasystems (PEGA): now $0.03 per share quarterly dividend, … Read more

Surveying Fourth Quarter Performance at the Money Center Banks

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Let’s examine a number of reasons why we don’t prefer banking entities and take a look at recent performance from industry constituents. A challenging rate environment and declining mortgage originations offer key headwinds.

The Mortgage Refinancing Boom Could Be Ending

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Early Wednesday morning, the Mortgage Banker’s Association (MBA) announced that refinancing activity declined 20% from one week earlier. Adjusted for the Labor Day weekend, total mortgage applications dropped 13.5% from the previous week. Consistent with the dramatic upward movement in interest rates, refinancing activity is down 71% since it peaked during the week of May 3, 2013. Why Do We Monitoring Refinancing Activity? When homeowners refinance, a couple outcomes can occur that pump more dollars into the economy. First, with a refinanced mortgage, owners may choose to take equity out of the home, allowing for large purchases like vehicles or even home remodeling. CoreLogic recently reported that 2.5 million more residential properties have returned to positive equity in the second quarter … Read more